Coal India asks power companies to ensure use of fuel as per agreements

NEW DELHI(PTI): State-run miner Coal India has asked power producers such as Reliance Power and Jaiprakash Power Ventures to ensure that the fossil fuel supplied to them under FSA should be used as per power purchase agreements (PPAs) with distribution companies.

In a letter to power companies, Coal India arm Central Coalfields Ltd said, “Since the coal supplied to the power utilities against FSA … it is ensured by coal companies that coal supply is only to the extent of coterminus with the long-term power purchase agreements (PPAs) that the power companies have signed with the discoms.”

CIL has asked these firms to provide affidavit over end-use of the coal supplied under fuel supply agreement. The letter has been addressed to power companies, including Reliance Power’s Rosa Power Supply Company Ltd, Maithon Power Ltd (MPL), a joint venture of Tata Power and Damodar Valley Corporation (DVC) and Jaiprakash Power Ventures.

“You are…requested to provide the affidavits…for the year 2014-15 and for the period April 1, 2015 to September 30, 2015 …affirming that the coal supplied has been used by the power plant as per long-term PPA and the power generated using this coal has been suppled to the discoms as per the PPA,” the letter said.

The government had earlier approved supply of coal to power plants with a capacity of 78,000 MW commissioned or to be commissioned during April 2009 to March 31, 2015. The government is considering a policy for auction of coal linkages.